Do Prenups Cover Digital Assets?
As digital assets continue to grow in value and importance, more couples are asking whether prenuptial agreements (prenups) can cover online businesses, cryptocurrency, domain names, and other digital properties. In today’s digital age, assets are no longer just physical or financial. They include social media accounts, online businesses, NFTs, and even intellectual property like ebooks and digital courses. At Foster Hsu, LLP in San Jose, we help individuals and couples craft comprehensive prenuptial agreements that address modern concerns, including protecting digital assets.
What Are Digital Assets?
Digital assets encompass a wide range of online and electronic properties, including:
- Cryptocurrency holdings (Bitcoin, Ethereum, etc.)
- NFTs (Non-Fungible Tokens)
- Domain names and websites
- Online businesses and e-commerce stores
- Social media accounts with monetization potential
- YouTube channels, blogs, and influencer brands
- Digital content such as ebooks, music, and online courses
- Cloud-stored intellectual property and software
Because these assets can hold significant financial and sentimental value, it is crucial to determine how they will be treated in the event of a divorce.
Can Prenups Cover Digital Assets?
Yes, prenuptial agreements can cover digital assets, but they must be carefully drafted to ensure enforceability. In California, prenups must be fair, voluntary, and entered into with full financial disclosure. A well-drafted prenup can specify:
- Who retains ownership of specific digital assets acquired before or during the marriage
- Whether income generated from digital assets (e.g., ad revenue, cryptocurrency investments) remains separate property
- How digital intellectual property will be valued and divided
- Whether joint digital ventures will be subject to division
- Whether future digital assets, such as new online businesses, will be classified as separate or marital property
Key Considerations When Including Digital Assets in a Prenup
1. Valuation of Digital Assets
Determining the value of digital assets can be complex. The value of cryptocurrency, NFTs, or online businesses can fluctuate significantly. It is important to include clear valuation methods in a prenup, such as using an agreed-upon expert or a specific valuation date.
2. Defining Separate vs. Marital Digital Assets
Clearly defining whether digital assets remain separate property or become community property is crucial. For example, if one spouse starts an online business before marriage, but both spouses contribute to its growth, the prenup should specify whether it remains separate property or if the other spouse is entitled to a share.
3. Income from Digital Assets
A prenup can determine how income generated from digital assets will be treated. For example, revenue from a YouTube channel or online business can be designated as separate property, ensuring that only the original owner benefits from it in the event of divorce.
4. Protection Against Unauthorized Use
A prenup can include clauses preventing a former spouse from accessing or interfering with digital assets post-divorce. This can be particularly important for social media influencers and content creators who have built a personal brand.
5. Planning for Cryptocurrency and Blockchain-Based Assets
Cryptocurrency presents unique challenges in divorce proceedings due to its volatility and difficulty in tracking ownership. A prenup can establish clear terms for how cryptocurrency will be disclosed, valued, and divided in a divorce.
Updating Your Prenup for New Digital Assets
Technology evolves quickly, and so do digital assets. If a couple acquires new digital assets after signing a prenup, they should consider a postnuptial agreement to update the terms. This ensures that any new online ventures, cryptocurrency holdings, or digital content are accounted for in the event of divorce.
Seek Legal Assistance Today
Prenuptial agreements are no longer just about real estate, savings accounts, and retirement funds. In the digital era, protecting your online empire is just as important. Whether you own a thriving e-commerce business, valuable cryptocurrency holdings, or a monetized social media account, a well-drafted prenup can safeguard your interests. At Foster Hsu, LLP, our experienced San Jose family law attorneys can help you create a prenuptial agreement that fully protects your digital assets. Contact us today to discuss your options.
Source:
sfbar.org/blog/the-california-prenup-a-marriage-plan/
